ZAR | South African Rand | OANDA South African Rand Overview The South African Rand is the currency of South Africa, and is issued by the South African Reserve Bank. The currency takes its name from the Witwatersrand ("White-waters-ridge"), the ridge where most of South Africa's gold deposits were found and where Johannesburg was built. The Rand has the symbol "R" and is subdivided into 100 cents. Coins are issued in 5c, 10c, 20c, 50c, R 1, R 2, and R 5 denominations. Banknotes include R 10, R 20, R 50, R 100, R 200 denominations. The South African Rand is also legal tender in Swaziland and Lesotho, and is accepted in Namibia. Economy Daunting economic problems remain from the apartheid era, including poverty, lack of economic empowerment for the disadvantaged, and inadequate public transportation. Unemployment is extremely high (approaching 25%), and South Africa ranks poorly for income inequality, as measured by the Gini coefficient.

Growth has recovered in recent years, but unemployment remains high and outdated infrastructure constrains growth. A Commission established in 1956 recommended giving up the pound sterling and associated terms pounds, shillings and pence in favor of a new currency named "rand." From 1982, the value of the currency started to erode due to mounting international pressure and sanctions against the country because of its apartheid policies. In July 1985, all foreign exchange transactions were suspended for three days to try to stop the devaluation. The currency continued to depreciate due to the uncertainty of apartheid reforms and black majority rule. In 1992, the currency depreciated to the level of R 3 to the dollar; in 1999, to R 6 to the dollar. The September 11, 2001 attacks pushed the currency to its weakest historical level of R 13.84 to the dollar in December 2001. The currency has since stabilized.

History A Commission established in 1956 recommended giving up the British Pound and associated terms pounds, shillings and pence in favor of a new currency named “Rand.” The South African Rand was introduced on February 14, 1961, replacing Round Sterling as legal tender, at two Rand = 1 Pound 10 shillings. 1961 was also the year the country became a republic and left the Commonwealth of Nations following a whites-only referendum. From 1982, the value of the currency started to erode due to mounting international pressure and sanctions against the country because of its apartheid policies. In July 1985, all foreign exchange transactions were suspended for three days to try to stop the devaluation. Symbols and Names Cent = 1/100 of a Rand Denominations Bills: R 10, R 20, R 50, R 100, R 200 Coins: 5c, 10c, 20c, 50c.

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9 African Countries With Stronger Currencies Than The Rand - Travelstart Blog 9 African Countries With Stronger Currencies Than The Rand 14 April 2014 Estimated reading time: 3 minutes 554 Facebook Twitter Email The Rand has had a lot of flack for its devaluation over the past couple of years. I already wrote about a few countries worse off than us , so now let’s take a look at the other end of the spectrum: African countries who’s currencies are stronger than ours. Now before you feel the urge to launch into a News24-comments-section-style-SA-self-loathing tirade, check out the reasons listed in the description of each, many of them have little merit to their strength. Botswanan Pula – R1.20 An obvious one is Botswana. The Pula has been stronger than the Rand for some years now and the country’s economy and political structure is often lauded as a shining example of how an African democracy can work. 1 Pula will cost you around R1.20, though this is not as bad as it was in around 2004 where it would have have cost you 20 cents extra.

Egyptian Pound – R1.50 Another example which has long been stronger than the Rand, Egypt, despite all its political turmoil has been able to retain a lot of its country’s currency value. 1 Egyptian Pound will cost you around R1.50. Libyan Dinar – R8.53 Yet another country in political turmoil with a strong currency is Libya. Perhaps it’s oil which is keeping things afloat but one Libyan Dinar will set you back around R8.53 currently, making it the strongest currency in Africa. Tunisia Dinar – R6.65 Recovering from its status as the birthplace of the Arab Spring, Tunisia’s Dinar gained almost 20% against the Rand this year. One Tunisian Dinar will now cost you around R6.65. Moroccan Dirham – R1.29 Rubbing shoulders with Europe, Morocco is in the news as much for illegal immigrants trying to smash down the border is shares with Spain as it is for its exotic culture and beautiful scenery. Morocco’s currency wasn’t always as strong against the Rand, in fact it was as recently at October 2012 when the Rand was more valuable.

1 Moroccan Dirham will cost you R1.29 currently. Ghanaian Cedi – R3.79 A very surprising example of a strong African currency, Ghana’s Cedi. Ghana is well known for its extensive natural resources, namely Gold from it’s Ashanti region (hence the Anglo-Ashanti gold company famous in South Africa). This one is actually a cheat though, the Cedi is actually in its 3rd rendition under the same name as the currency has been revalued a couple of times. The most recent revaluation was 2007 and it’s lost almost 50% of it’s value against the Rand since then, so the current rate of R3.79 for 1 Cedi shouldn’t last long. Sudanese Pound – R1.85 Another story very similar to the Ghanaian one is that of the Sudanese Pound. Revalued successively during its post-colonial period, the most recent revaluation came in 2011 following the independence of the oil rich Southern half of the country which became South Sudan. The Sudanese Pound is now worth R1.85, but likely not for long.

Eritrean Nakfa – R1.01 A country you probably haven’t heard from before, it split from Ethiopia in the early 90’s but has a currency, roughly on the same value as ours. This is only a recent development though since the beginning of 2014 and is as a result of the currency being pegged to the US Dollar. 1 Nakfa will cost you R1.01. Zambian Kwacha – R1.73 The country formally known as the colony of Northern Rhodesia has sadly never been known as an economic success story and at a stage had an exchange rate of 1 US Dollar = 5120 Kwacha. The currency was revalued in January 2013 and until recently 1 Kwacha cost over R2, today 1 Kwacha buys you only R1.73. Related posts: Finance101 April 14, 2014 Nick, I think you should look up the definition of what it is that makes a currency ‘strong’. Given your argument above, the Rand is ‘stronger’ than the Japanese Yen (about 9.5 Yen per Rand).

‘Purchasing Power Parity’ is probably another concept worth reading up on Nick Paul April 14, 2014 Good point Finance101, that could be a good topic for a future post. Really here what I was interested in was that so many people make such a big deal out of the value of the Rand and kick up such a stink about it, when the reasons behind the supposed “strength” of the other currencies shows that this really doesn’t mean much at all. Revaluing a currency 3 times which results in it being more valuable than the Rand doesn’t mean much, especially when inflation etc is sending your economy and currency value up sh*t creek. All in all, we have it a lot better here than (almost?) every country in the list above.

Albert palombo April 17, 2014 The only meaningful comparison is where you compare the cost of the average earner’s basket of purchasses in each of the countries and apply a correction factor another useful measure is to calculate that cost as a percentage of that group’s average earnings to give an indication of their standard of living Bella April 14, 2014 Tomeasito September 28, 2015 You guys are complicating this issue. Currency is an item on its own and is sold to those who want it. The demand of currency gives it value. yes there are a lot of other factors mentioned above, but all of these, will either give rise or downfall of demand for the currency. it is not just a single factor, but all of the factors affect demand and supply of the currency. Travellers, investors who want to invest in the country etc to name a few buyers of currency. So yes most stable oil producing economies will attract investors who will by currency more than Gold and diamond. dean April 15, 2014 Just because a value is placed on a currency doesn’t necessarily change its value.

For example the Zambian Kwatcha is the value it is after they remodelled the currency and took a fair few zeros off the end of the large number. This I found out after travelling there about a year or so ago. sarah April 17, 2014 Nick you clearly haven’t been to any of the countries in the list above. Have it better in what sense, when SA has now the 2nd strongest economy in Africa after Nigeria but still the largest rich-poor gap in the world??? The people using those currencies at least don’t experience the depths of poverty experienced in South Africa. They clearly have better value for money, not only in currency but in quality of living standards. Even countries with weaker currencies experience far better living standards. Rand is nothing to ride home about. Nick Paul April 22, 2014 Hi Sarah, you caught me out! No, I haven’t been to any of these countries. The purpose of this post was to highlight that the strength of a currency really doesn’t tell us much about the strength of a country’s economy. South Africans love to hate the Rand, constantly moaning about how weak it is and that they can’t travel on it.

I wanted to point out that yes, there are African countries with stronger currencies but many of them don’t have merit for having a stronger currency. Perhaps I could have focussed more on the actual differences between the countries but it would have for a very long read. Perhaps an idea for next time. menzo April 18, 2014 What make a currency strong? We have minerals in SA but our currency keep dropping. Libya was in political turmoil yet their currency is still stable Andrew Mungherera April 19, 2014 Visit some of these countries and find how the majority are better economically empowered than the majority in SA. It is then you realize who is really in the ‘Dark’ AVincentZo May 20, 2014 I still cling to my SA rather than go and conduct a physical investigation of the condition of African economy. I think life is better and more enjoyable under the Rand umbrella than anywhere in this dark continent. Currency strength should be meassured by how that currency whether politically or religiously accommodates and tolerates diversity.

If christians are abducted and forced into other forms of religion, left wing political activists are bombed and tortured, and so on goes the rest of African tales, then the strenght of the currency boasted about discourages foreign investment which to some degree promotes real economic growth. In my view, SA Rand is much stronger than any of the 9 mentioned above. ken phiri kazawara June 24, 2014 I am a Zambian citizen,have stayed in South africa for two years,the level of poverty is to high than in my country or botswana,southafrica is only known for its historical people outside they think like its a country of full of opoturnity to if you came here that’s when you realise that your country is better than these place.I support nick zambian curency is more powerful than rand the only thing you can came and to in southafrica is to buy goods cause they are more cheap than in my country if I go and sell their I make more profit.

Zawa Al May 21, 2015 I travel to Zambia often , so many things wrong there although I must admit there has been some improvements but surely can’t compare to SA , infrastructure is lagging behind by decades , per capita is abysmal , economy is largely informal natural remnants of severe dererioration over many years , unemployment is high , corruption evident just as SA does but to even think anything is better about living in Zambia , the currency has benefited from revaluation , lord know if it can be sustained .

I live in SA not from SA but I love SA , ken phiri kazawara June 24, 2014 I am a Zambian citizen,have stayed in South africa for two years,the level of poverty is to high in southafrica than Zambia, southafrica is only known for its historical people outside they think like its a country of full of opoturnity but if you came here that’s when you realise that your country is better than southafrica.I support nick zambian curency is more powerful than rand the only thing you can came and do in southafrica is to buy goods and go and sell them in your country cause they are cheap,if I go and sell in Zambia I make more profit. Zawa MXOLISI July 13, 2014 hi ken phiri kazawara, you are really funny lol. You claim to think zambia is better than south africa yes? Would you explain why we get people from your country and other african countries everywhere in the streets of south africa? We are the best place to live in, in south africa i tell you mate!

I don’t think there is any african country that would say they have alot of south africans trying to make a living there. Guess that explains which country is of best preference yes? zozo August 9, 2014 strange enough our brothers from the the african continent are floking down to our country yet claiming their currency being strong , if that so why cant they stay in their countries Lesgo August 12, 2014 Hi Mxolisi you are wrong there mate Botswana is much much better.though in Botswana Batswana are nearly 2.2 million and half a million are foreigners mostly from South Africa,Nigeria,Zimbabwe……Batswana don’t walk the streets just visit Gaborone. Al May 21, 2015 MX I agree with you , nothing the guy says is fact , I’m not from SA but travel into the region and across Africa a lot , currency values mean nothing at all , standard of living and basic access to services has a greater impact and SA particularly shines in that area , yes there is abject poverty in some sectors but .

even that level outperforms poverty levels in most African countries … Some of the comments made rather uninformed and quite frankly unnecessary Mr shange July 28, 2014 a billion Rand budget which is 10 times bigger than that of Zambia tells of how powerful our economy is…u budget on what u make….so all others can spew bile about their currencies being strong but Rand is still up there… Moyana November 27, 2014 I ‘ve been to most countries in Africa, including the ones listed above. Honestly speaking, life in South Africa is far much better as compared to any of the African countries… including Nigeria! South Africans keep complaining but they have no idea that they are far much better than any African nation out there, as most countries still have most of their citizens living below the poverty line. The value of a currency really means nothing. One important factor to look at is not only the so-called “buying power”, but also something economists call “GDP per Capita”. I am not an economist but I can attempt to elaborate GDP per Capita as the average amount of money that a country can equally share among its citizens.

Nigeria was recently declared Africa’s strongest economy, reposition South Africa and the second. But how do these two nations’ GDP per Capita display themselves? For a broader understanding of this GDP per Capita concept, I can explain it using an analogy: Mr. Nickelson, a polygamist of 3 wives and 21 children has a 5 hectare farm that can produce 50 tons of grain every year. Another family of 3 children fathered by Mr. Courtes with only one wife, has only a 2-hectare-sized farm that can only produce 20 tons of grain per year. Looking at the above, we lack no doubt that Mr. Nickelson has a bigger grain reserve than Mr. Courtes. However, looking at the sizes of the 2 families, we see that Mr. Nickelson can give only 2 tons of grain to each of his wives and children, whereas his friend, Mr. Courtes, can have himself, his wife and children load 4 tons each!

Now back to our GDP per Capita concept, Nigeria has a population of 160 million with a total economy of USD580 billion, and South Africa has a population of 56 million with an economy valued at USD350 billion. Now with the amount of money that Nigeria has, each citizen can equally have USD3,625.00, and South Africa can give to each and every citizen in Mzantsi, an amount equivalent to USD6,250.00 – almost double that a Nigerian can claim! Then, a new question now arises: what effect does the value of a currency has to the economy, and what effect does an economy have to a nation? Only after we have answers to the above question shall we understand the spectrum of economics. Nadia December 24, 2014 Those that are saying the Kwacha is weaker than the rand. Try knock of a few zeros off the zip dollar and see if the zip dollar will be equally strong. The zambian Kwacha is the only currency that has once been stronger than the British pound. And is one of the most improving currency even after a few changes have caused our economy to be challenged.

Other than that we are getting there. Most south African stores are now flooding our malls cause of the currency here. You sell clothes at an exact exchange rate example R450=k450 and yet the kwacha is double the value hence profitable to you. South Africa rand R100=k60=$10. Shabbier April 11, 2015 All the above African countries have much smaller economies than South Africa. Most of them are basically poor countries compared to S.A. How is it that the S.A Rand is much weaker than their currencies. It just makes no sense. What’s pulling the Rand down! Is it the incompetence of our government or bad economic growth? I think it’s both but still it’s rather strange that the Rand is weaker then the currencies of the countries mentioned. Can someone please explain!!! Hi Cornelius, Thanks for getting in touch. The current Rate of exchange is: BWP1 = R1.26, so the Botswana Pula is still stronger then the Rand. The Pula has been stronger than the Rand for some years now and the country’s economy and political structure is often lauded as a shining example of how an African democracy can work.

I found the following info which is pretty interesting: Since independence, Botswana has had the highest average economic growth rate in the world, averaging about 9% per year from 1966 to 1999. Growth in private sector employment has averaged about 10% per annum over the first 30 years of independence. At the start of the 21st century, however, the economy of Botswana stagnated up until the early 2010s when it registered for the first time since the economic boom a GDP growth up above the 6-7% target. Botswana is also commended for the site of Africa’s longest and among the world’s longest economic booms (which almost surpassed that in Asia’s largest economies). The relatively high quality of the country’s statistics means that these figures are likely to be quite accurate. The government has consistently maintained budget surpluses and has extensive foreign exchange reserves. Botswana’s impressive economic record has been built on a foundation of diamond mining, prudent fiscal policies, international financial and technical assistance, and a cautious foreign policy. It is rated the least corrupt country in Africa, according to international corruption watchdog, Transparency International.

By one estimate, it has the fourth highest gross national income at purchasing power parity in Africa, giving it a standard of living around that of Mexico and Turkey. motlatsi August 13, 2015 If SA is bad in a sense of poverty, why all these people from other african countries with strong currencies leave their strong currency countries and decide to come to South Africa where they say poverty is like breathing in and out? Why Woman of Neighbouring cross boarders illigally just to get best medical service for their pregnancy and want their kids to be born in south africa so that they can have full citizen rights? Because SA is the best in africa. law August 21, 2015 currencies mean nothing an south africa is the best country with the best economy ,just that nw we r strugling a little bit because of china s economy ,remember china is the only country that purchase most of our products Very true, South Africa is a land of opportunity. Beautiful country we live in 🙂 chiba October 22, 2015 People here have very little information about countries. i have stayed in most southern african countries, exept few like angola, swaziland, mozambique.

I have been to south africa, zimbabwe, malawi, zambia, nambia, botswana, just to mention a few. south africa is the most industrialized and good infastracture, that does not mean its economy is the best, if you look at there budget, yes its big but its not catering every person in there country, south africa was good years back, but now things are failing. there so many south african in other countries including zimbabwe, botswana, nambia and zambia. so you guys are you telling we are should chase them out. its be reasonable when are taliking about other countries. botswana is good and stable but for the past few years the counrty standards are going down. its not that peaceful. the media is highly sensered. there is so much crime but you will never see it in the paper, just a few stories here and there. zambia is there another with the only problem being political leaders and corruption, mind you south africa is worse then zambia when it comes to corruption. but the country is growing faster then almost all the countries in the southern africa. zambia made sure that each and every country in africa is independent.

there so many south africans, zimbabwens, congoless, malawins, angolans. rwandess, and many other africans, european and asians, but you will never hear this country go to the streets to burn people alive. thats how peacefull that country is. zimbabwe is good there only problem is the leadership. but the crime rate has gone up. so when you are comparing the countries without visting and staying there, you might think your country is the best, but in the real world others are better then yours. having your country being well advertisered does not mean its the best. the other thing you need to look at is the budgeting balancing with the population and economy. every party of this africa is the same. africa is africa every single part of it. dont lough at other countries yours might be worse. good day every. we are all africans. Hamas November 11, 2015 I see!! Interesting comments! I live in SA from west Africa. Facts are facts! The are many opportunities and riches in south Africa but…hey! Poverty in SA is toooo bad as compared to west Africa!

Amongst the rural blacks in SA is in eye sore! Probably as Bible has “With knowledge you have riches”! No one can be rich in absolute ignorance and that is perishing black south Africans in the land of honey and milk! Thanks for getting in touch. Living standards in Botswana are high by African standards, but vary considerably across the country. As in many countries, there are widely different standards of living in Botswana between the rich and poor. I’ve found the following on the internet which mentions some interesting facts you welcome to read through this. Sam April 3, 2016 Having good infrastructure is not an indicator of a county’s economic strength and that’s the mistake most black South Africans make. The South African rand has fallen and the economy is at the brink of total collapse. There’s no African country that is growing at 0.8% like South Africa, so that tells you a lot. The myth of South Africa being the best in the continent is what fuels xenophobia by black South Africans who after 21 years have forgotten how full they were in our countries. Corruption and education here are also among the worst in Africa. South Africans should just accept that the spotlight has passed to other countries.

Max April 16, 2016 I think we should separate the issues on here. If we want to discuss or compare any African country to SA we should make a distinction. Yes the South African Rand has fallen compared to the countries in question but it is not true to say those countries are better than SA. SA is far much better than some countries on the list and this can be seen from the citizens flocking to SA for greener pastures. SA is better many ways except they have most likely the highest crime rate still! Mandla Mnguni May 16, 2016 Interesting conversation about African countries, their currencies and standard of living. At times it is good for a currency to be weak, as long as this leads to more production, tourism and further investments. Most of the countries in Africa have Government controlled currencies with the result that investors can’t get their returns out of the countries concerned. They cannot even use the money to buy stock from abroad. Nigeria, Angola, Ghana etc. Long term this becomes a problem, investors pull out. South Africa however has a free market economy (value of the rand is determined by what we sell and what we buy that includes stock market products).

At the moment the rand is weak because (1) There is a general risk associated with third world countries. (2) There is a general mismanagement of the economy by Government, that includes finance minister Nene’s removal. (3) The huge imports of food due to draught. (4) The general depreciation of our minerals due to weak demand from China. Most of the above reasons are temporal, so we don’t need to panic. A correction is coming soon as long as we continue producing and we attract direct foreign investments. Zuma is not going to rule for ever(at least the constitution does not allow him to do so), if he does we are doom. With regards to whether South Africa is worse than the other 9 countries with stronger currencies, I don’t think so except for Botswana maybe(because they have few people) but we still have better road infrastructure, better universities, better manufacturing sector(they buy most of their products from South Africa). I have been to all the countries mentioned above except Egypt). Non of them can economically match the South African economy. Even the gap between the rich and poor is compensated by the fact that in SA there is Old age grant, children grant, which is non existant in the rest of Africa.

It makes a difference, just that it might also be the reason why some rural communities have stopped subsistence farming. I have travelled most of Africa and I spent 5 years in Cuba and 1 year in Germany. Those talk of Zambia being better have only been to rich sections of cities. You can find people using charcoal for cooking in some townships of Livingston. Matoti May 20, 2016 I get you guys all of your right and wrong. What I want to know is,is it possible to have one Afro currency,and one Afro travelling document ? So we can be a one united Africa! Innovations July 20, 2016 Well they can say whatever they want to, but they have now crowded mzansi yet the claim to be better than us. One day we will have an intelligent president and all this nonsense will stop. We love you africans outside RSA even though you are mocking us.

mxm MICAH September 9, 2016 South Africa is a type of United States of America in Africa.I am a Nigerian,but there is something about South Africa that makes it stand out as the best in Africa.”IT IS THE LAND OF GREAT OPPORTUNITIES” Zawa Ken Phiri September 17, 2016 2 years ago, I commended here regarding SA economy. Many here you had to argue with me. I was in SA 3 months ago, SA economy as gone even more down. The prices of goods have risen so much, the Rand is losing its value to a dollar. The country is facing electricity shortage that, their is an increase of load shedding, now after all your commenting regarding praising SA, are you aware that we are supplying you electricity. Zambia still stands with a strong currency to US dollar. Zambian kwacha today is buying $1 at K7 to 9. While rand is buying $1 at R14 to R16, now who is better? Never argue from something you don’t understand education is important, the level of illiteracy is to high in SA, thus only few understands this issues.

Ba mfwetu somuchela Mzansi yapelile manje, zonke izinto zapelile, muyashonepa. Ken Phiri Chigbogu Eze September 23, 2016 Infrastructure in south africa is okey but poverty their is second to non.Many west african came with high hope,but they were caught by poverty beyond their imagination”but going back home is not as easy as you think.Strong currency and economy is nothing with out improving the livies of the people. Phofolo E Kgolo How to explain why the South African rand keeps falling — Quartz January 18, 2016 Quartz africa Given that South Africa operates within a flexible exchange rate regime , the value of the rand, like any commodity, is determined by the market forces of supply and demand. The demand for a currency relative to the supply will determine its value in relation to another currency. Theoretically, the demand for a floating currency—and hence its value—changes continually based on a multitude of factors. In the case of the rand, its current weakness can be attributed to a myriad of structural problems facing the local economy.

The main determinants of a currency’s value include demand for a country’s goods and services. This is closely linked to the growth and national income of its main trading partners. Equally important is the domestic interest rate. If it is high it is likely to attract foreign capital, causing the exchange rate to strengthen. But high inflation can wipe out the benefit of high interest rates to foreign investors. Additional factors serve to drive the currency down. These include a current account deficit. The current account deficit gets bigger when a country spends more on foreign trade than it is earning and has to borrow capital from foreign sources to make up the difference. This implies that a country requires more foreign currency than it is getting through sales of exports, and it supplies more of its own currency than foreigners demand for its products. This excess demand for foreign currency leads to depreciation in the value of a currency. Factors such as political instability and poor economic performance can reduce investor confidence. This inevitably forces foreign investors to seek out stable countries with strong economic performance. Thus, a country that is perceived to have positive attributes will attract investment away from countries perceived to have more political and economic risk. There is a further complication to currency movements.

The buying and selling of currencies is no longer driven only by the need to facilitate trade but also by the demand for currencies as financial assets. This means that currencies are bought and sold like any other asset. Decisions by traders – to buy or sell a currency – can have a marked effect. The impact of the turmoil in China South Africa’s currency lost 26% of its value in the six months after turmoil gripped Chinese markets in June 2015. This was when the People’s Bank of China surprised markets by executing a 2% devaluation of the yuan and changing the way it traded its currency. The aim was to weaken the yuan to boost its export competitiveness . This, coupled with slower economic growth, has aggravated the situation for South Africa as well as other African countries that rely on oil and mineral exports to China. Emerging markets most exposed to lower growth prospects and subdued commodity prices have seen the sharpest falls. The rand is expected to remain under pressure with many analysts predicting that it will fall further in 2016. It is not alone. Many other emerging market currencies have been dealt the same fate. But the rand is substantially weaker than it might have been.

The sudden reshuffling of the finance ministry was seen as weakening one of the country’s key macroeconomic institutions and continues to undermine market confidence. Implications of the weak rand The weak rand has a number of implications for the country’s growth prospect. Firstly, the weakening currency carries the risk of pushing up inflation because imported goods are more expensive. This means that the South African Reserve Bank faces a difficult decision. It can keep interest rates low but then faces even higher inflation. This will only devalue the rand further. If the central bank takes more aggressive action by raising interest rates, it risks stifling growth in an economy that is only growing at 1.5% . The rand’s weakening could not have come at a worse time for South Africa. The country is suffering from the worst drought since 1992 which has increased food costs and pushed the farming industry into recession. The price of white corn, a staple food in southern Africa, has more than doubled on the South African Futures Exchange in the past year . With large parts of the economy already in recession, coupled with worsening debt levels and the threat of credit-rating downgrades , it looks like the economy will contract.

This implies that finance ,inister Pravin Gordhan has limited room to boost spending. The weak rand will also see the cost of imported goods for consumers rise. In addition, while the rest of the world benefits from record low oil prices, the country’s weaker currency means it will not able to take full advantage of this and may face higher fuel prices in the near future. On the flip side, the weaker rand does have some benefits. It is helping mines stay afloat. And gold mines could make profits again as the gold price has held up more than the prices of other minerals. There may also be a boost in tourism. The weaker rand may also have short-term benefits for sub-Saharan countries importing substantial volumes from South Africa. Finally there may be a boost for local exporters. But this could be stifled by the rise in the price of imported raw materials which will contribute to higher costs of production for manufacturers. Is the rand over-traded? In 2013 the South African rand was ranked as the 18th most-traded currency in the world .

Surprisingly, while South Africa accounts for only 0.3% of the world’s daily foreign exchange market turnover, the rand accounts for 1.1% of worlds daily currency trading . This difference is largely due to the daily trade taking place outside South Africa by non-residents. This is partly a result of virtually no exchange control restrictions for foreigners trading the rand but many in place for South Africans who wish to trade in foreign currency. This has been highlighted as a further problem faced by the central bank in trying to influence the value of the rand. South African Rand SOUTH AFRICAN RAND Introduction | Overview | Structure | History | Factors affecting change in exchange rates | Weekly trend of South African rand Introduction Rand is the official unit of currency used as a legal tender in Republic of South Africa. The ISO 4217 currency code for the South African rand is ZAR and numeric code is 710. ZAR is an acronym for Zuid afrikaanse Rand, "Zuid Afrika" being a term used for the country�s name in the Dutch language. It was introduced as the national currency of South Africa with the independence of the country in 1961 and hence it replaced the South African pound.

The rand is divided into 100 equal parts of its subunit, which is none other than "cent". The South African currency gets its name from "Witswatersrand" i.e. the name of the white water ridge onto which the city of Johannesburg is constructed and most of the South African gold deposits are located, rand meaning a ridge. In daily use, South African rand is denoted with the symbol "R". Overview South Africa is one the fastest developing countries of the world courtesy the possession of large pool of abundant natural resources, but the growth of the nation still had been on a weaker side. The problems of high poverty and unemployment still prevail dominantly over the economy of South Africa. The same trend had been observed in the case of value of its currency. During the initial 20 years of existence, the South African rand was valued even higher than US dollar; the fall in the value of the currency in the recent years hasn�t been recovered yet. Though some industries have benefited from this fall in the value of rand like the tourism industry and even the more important gold mining industry.

In the current scenario, the rand has caught attention of the speculators and investors because it is considered to be under rated by 15 to 20% and the values are subject to fluctuations. There also exist some government currency policies to control the import-export of the currency. One is that the import and export of more than R5000 is restricted except if it is exchanged with the countries Lesotho, Swaziland and Namibia. Any foreign currency imported and exported from South Africa must be declared. Structure South African rand being a newly adopted currency uses the decimal system like all other modern currencies. The issuance and distribution of rand in bank notes as well as coinage are in the hands of South African Reserve Bank. The calculation of the requirement of currency in the country, the supply and maintenance of the availability are all the functions of the reserve bank. But the major issues like what denominations to be issued or removed etc are decided upon by the government of the country. The unit of South African currency is subdivided into 100 equal cents and like most of the currencies; the smaller denominations of the currency are available in coins only. Coins are minted in 9 denominations i.e.

1 cent, 2, 5, 10, 20, 50 cents, 1 rand, 2 and 5 rands. The 1c and 2c coins are rarely used in the daily operations as most of the goods in the country have rounded off values to the nearest 5c. Some other coins are also issued by the reserve bank that cannot be termed as a normal currency and are used rarely. One of them is a gold coin Kruger rand, that can be cashed from any bank in the world and is valued depending upon the value of gold. The other one is the Mandela R5 proof coin that is the first ever coin in the history that feature a smiling statesman. Rand banknotes are printed in only 5 face values i.e. R10, R20, R50, R100 and R200. History The African continent stayed unexplored for ages until the European super powers of that time started exploration voyages. The "cape of good hope" was the first African headland to be discovered by the Portuguese and by 1652, the Dutch started to get settled there.

The cape was an important landmark in establishing a sea route to the Far East and the country acted as the door to explore Africa. The inhabitants of South Africa earlier used barter system of exchange before it was discovered but with time as it transformed into a trading center, many a currencies were used depending upon the respective rule over the country. The first currency introduced in the country was guilder and since then a long list of currencies were used. During the late 18th century, Rix dollar used to be the currency of South Africa and during this phase, for the first time in history of the country, paper money in the form of written bank notes were issued. Shortly after the introduction of paper money in the country, bank was established for the first time in 1793 with the name of Lombard bank but was forced to discontinue its operations in 1837 because of the stiff competition from the private banks. The current official currency of South Africa i.e. South African rand came into existence 1961 when it replaced the prevailing currency at that time i.e. pound sterling.

The reserve bank of South Africa was established in the country as the central bank in the year 1921, took over the control of the new national currency. Previously, the printed bank notes of currency were imported from the United Kingdom, as there were no printing facilities available in the country but a short while after the introduction of South African rand, a bank note factory was also established. Since its inception until 1982, rand had a high value, even higher than the US dollar. But after 1982, the phase of constant devaluation of the currency commenced. A series of events including the infamous Rubicon speech by the state president adversely affected the currency and till 2001, the currency dropped down to its lowest value that was US$1 = R13.84. The currency has recovered quite a bit but is still at value lower as compared to that of dollar. Factors affecting the exchange rates between two countries The volatility in the foreign exchange rates depends upon a numerous macro economic factors that have different degrees of importance to different economies of the world. Some special and exceptional factors affecting the rates may also exist in the case of different countries.

Following are shown the common factors on which the foreign exchange rate depends Flow of imports and exports between the countries Flow of capital between the countries Relative inflation rates Fluctuation limits on exchange rate imposed by the governments of the countries Merchandise trade balance Rate of inflation in the country Flow of funds between the countries for the payment of stock and bond purchases Relative growth Short term and long term interest rate differentials Cost of borrowings South African Rand Adoption For Zimbabwe Should Boost Investment & Be Championed South African Rand Adoption For Zimbabwe Should Boost Investment & Be Championed {{article.article.images.featured.caption}} Opinions expressed by Forbes Contributors are their own. Full Bio The author is a Forbes contributor. The opinions expressed are those of the writer. Loading ... Loading ... This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe Zimbabwe’s adoption of the South African rand (ZAR) as its main transaction currency to replace the US dollar in the country’s multi-currency system will “encourage” foreign direct investment according to an investment specialist in Zimbabwe at one of the world’s largest independent financial advisory organizations managing billions of dollars.

The move, which could come as soon as in the next few weeks, could help the country reduce domestic prices and raise its international competitiveness. The assessment from South African-born Shane Helberg, Area Manager of Zimbabwe, Botswana and Mozambique at deVere Group , which has around $10bn under advice from 80,000 mainly expatriate clients globally, comes after reports that the development is around the corner. His comments follow presentations made on 6 June by representatives of the Bankers’ Association of Zimbabwe and the Confederation of Zimbabwe Industries to the Parliamentary Portfolio Committee on Finance and Economic Development, where it was stated that the adoption of the rand would be one of the measures required to address the cash shortages facing the country. A puzzle with the national flag of Zimbabwe and a US dollar banknote. (Image: Shutterstock). And, Zimbabwe certainly needs an investment boost. This year has witnessed an escalation of cash shortages in the country, which is mostly a US dollar-based economy after domestic currency hit the skids back in the 2008 after hyperinflation gripped the nation.

Economy & Hyperinflation Zimbabwe witnessed the first hyperinflation of the 21st century, which at its peak in mid-November 2008 reached an incredible monthly rate of 79.6 billion percent. At this point it took prices just 24.7 hours to double. The economy went into free fall following a campaign to seize white-owned commercial farms. And, recent years saw a move from a broad range of currencies to an almost dominance by the US dollar. Today the Greenback accounts for around 95% of all transactions in the country. At the heart of the matter for Zimbabwe is a dire shortage of foreign investment. Shifting to the South African rand could help the authorities gain time and allow them to initiate a much needed shot in the arm in terms of implementing policies that are investor friendly. Helberg, who served with the British military for five years before joining up with deVere in the Zimbabwean capital Harare, commenting says: “Zimbabwe’s adoption of the Rand as the main trading currency within the country’s multi-currency system should be championed.” As to who will champion it, reports have pointed to the Zimbabwean and South African governments reaching an agreement during the recent continental summit in Ethiopia.

The South African president Jacob Zuma has also been quoted as saying: “I’m very much impressed by such a great and historical event that will be witnessed between the two countries both economically and socially.” “Whilst the rand perhaps is not as weighty as the US dollar for international trade as it is more volatile against major currencies, it must be noted that the dollar has not been effective in arresting the freefalling economy in recent times,” remarks Helberg. Multi-Currency System Zimbabwe introduced a multi-currency system in 2009 to help prevent unofficial trading. In addition to the US dollar, the country allows the use of currencies including the rand, yuan, pound and the euro. While that helped control inflation, it also left the government short of cash to buy essential imports and pay its bills - 80% of which involve civil servants’ salaries. Stability and certainty is always welcomed by foreign investors and especially so in emerging markets . And, not all emerging markets – especially in Africa - can be considered homogenous. Primary Currency: Benefits Using one primary currency, the rand, for commerce is likely to be beneficial for a number of key reasons.

“Firstly, it’s is better to move to using one single semi-convertible currency than a multiplicity of currencies at the moment as it reduces confusion and uncertainty,” says the South African. Move To The Rand Should the move prove to the Rand be successful, Helberg contends that “we can expect further levels of foreign investment and in turn more expats moving to Zimbabwe.” A steady rise in foreign investment into country will represent a clear mark of success after such a move. Clearly, international organizations and people bring with them a raft of potentially enormous associated economic benefits to any host country. “Zimbabweans and expats already in the country will be thankful that a single currency could replace the present variety of currencies used for the added economic stability it will likely generate,” note Helberg in Harare. Secondly, the measure should also help boost trade links with South Africa, Zimbabwe’s major trading partner. For many years, South Africa has been Zimbabwe’s single largest trading partner. According to statistics from the Reserve Bank of Zimbabwe imports from South Africa in March 2016 represented 22% of total imports. On the export front, South Africa accounted for 78% of the nation’s total.

Chinese Investment The future development is especially important for Zimbabwe as it will make China, amongst others, more confident about investing in the country if it helps stabilize the economy. It has been reported that China is expected to channel more than $20bn worth of investments to Zimbabwe and South Africa. And, Helberg posits that this “arrangement might have helped spur on the agreement” on rand use between the beneficiaries. Currently the majority of Zimbabwean manufacturers are importing raw materials from South Africa. In addition, Zimbabwe imports household and basic goods from South Africa as the local industry is still struggling to meet demand. Similarly, Zimbabwean supermarket shelves are found to have around two-thirds of imported products mainly from South Africa. Zimbabwe’s main industries are Mining (coal, gold, platinum, copper, nickel, tin, diamonds, clay, numerous metallic/non-metallic ores), steel; wood products, cement, chemicals, fertilizer, clothing and footwear, foodstuffs and beverages. Thirdly, such a move will increase Zimbabwe’s competitiveness in broader global terms as it will make exports cheaper. Also prices in Zimbabwe will reduce. “When the rand becomes the de facto currency of Zimbabwe, the country’s economic woes could seriously start to diminish” he also suggests.

And, this according to the South African would “drive confidence in Zimbabwe” as being a place to do business and invest. Property Market On the property front, emerging and frontier markets - including in Africa - presents unique and individual challenges for property occupiers and investors. And, highlighting that countries across Africa cannot be considered as homogenous, a report published last year by commercial property and real-estate consultants Cushman & Wakefield rated Zimbabwe ‘high risk’. In a risk analysis of the top 42 emerging and frontier markets around the globe, while Cushman & Wakefield’s annual ‘Emerging and Frontier Markets’ (2015) report ranked five African markets in the top 10 globally - with Botswana overall number one as the “most transparent” of emerging economies - Zimbabwe ranked a lowly 39th just one spot ahead of Angola. The principal office market in Zimbabwe is the capital city Harare, which has a population of around 1.5 million. The report noted the “weakening economy and on-going political uncertainty” had led to reduced demand from international occupiers over the past few years and higher vacancy rates in the city centre.

The focus for most occupiers is on suburban locations, with cost reduction and consolidation remaining key trends. In terms of the rental outlook for 2016, this report forecasted Harare’s USD/sq.m/year level at $144.00 ($120.00), a decline of 17% over the previous year. Demand was found to be still highest for smaller-sized suites, with higher quality accommodation letting more quickly. However, larger floor plates were taking much longer to let. deVere is one major global brand that is currently using its resources to develop its presence in the country with its strategic and ambitious growth plans for the longer term. Helberg reveals that the firm intends to "take on more financial advisers and support staff" to meet the anticipated demand across Zimbabwe and wider southern Africa throughout 2016/17. The rand was trading at around ZAR14.78 against the US dollar at 17.34 UTC today, with its low over the past 12 months being 12.25 and a high of 16.88.

Prior to the Brexit vote USD/ZAR was at 14.40 but has receded now by 2.63%. ZAR - South African Rand rates, news, and tools South African Rand History As a trading center, multiple currencies circulated throughout South Africa. The first official currency used was the Guilder. During the late 17th century, the Rixdollar was used and was the first South African currency to include paper notes. During British occupation, in 1826, the Cape Colony was put on a sterling basis, though other currencies, including Spanish Dollars, US Dollars , French Francs, and Indian Rupees continued to circulate. In 1921, the Reserve Bank of South Africa was established as the central bank. In 1961, the South African Rand replaced the Pound under a decimalized system. The ratio was 2 ZAR to 1 GBP. Paste link in email or IM Link Url This country has nine currencies - Feb.

29, 2016 This country has nine currencies by Eleni Giokos @CNNMoney February 29, 2016: 11:43 AM ET How Zimbabwe functions without a local currency Managing your money in one currency is tricky enough for most people. Imagine having to keep track of nine. That's a hard fact of life for many of Zimbabwe's businesses, who have been forced into the role of foreign exchange dealers after the country's dollar collapsed and was withdrawn from circulation. They'll trade in the U.S. dollar, Australian dollar, South African rand, Botswana pula, euro, British pound, Japanese yen, Chinese yuan and Indian rupee. "Most currencies are for trading purposes," Reserve Bank Governor John Mangudya told CNNMoney. "50% of our trade is with China and South Africa so we need to allow trading in many currencies." The U.S. dollar is Zimbabwe's official "reserve currency." Mangudya says the country has no intention of ditching it for the yuan, or the rand. On the streets of the capital Harare, the U.S. dollar is preferred but traders accept a variety of currencies.

Near the borders with South Africa and Botswana, the rand, pula and the euro are popular. Still, the popularity of the rand has declined recently after it plunged 30% last year. Zimbabweans are starting to dump their neighbor's currency in fear of further depreciation. Ultimately it's about the rate they can negotiate. Local business will accept almost any currency in the basket, but at a far higher rate than the official rates. Zimbabwe's currency crisis started in 2000 when the government implemented aggressive land reform. A combination of sanctions and a loss of confidence in the economy saw the Zimbabwean dollar crash. The last official measure of inflation was 230 million percent in early 2009, the year when the U.S. dollar became legal tender. Mangudya says the central bank "printing presses were on all day." The price of goods changed by the minute, and Zimbabwe became known for its one hundred trillion dollar note. Shingi Munyeza, chairman of Vinal Investments, says he would "pay for coffee before it was made because by the time you sat down to drink it, the price would have increased."

Question: Which country has the rand as its currency?
Answer: South Africa